A penny. It doesn’t sound like much, but when it comes to the gender wage gap, it’s a big deal. New data shows that in 2023, for the first time in two decades, the gender wage gap widened significantly.
According to the U.S. Census Bureau, between 2022 and 2023, the wage gap grew by 1 cent for women working full-time, year-round. In other words, for every $1 a man earned in 2023, a woman earned just 83 cents. That’s down from a historic high in 2022 when women were making 84 cents for every dollar earned by a man. “This is the first statistically significant annual decrease in the female-to-male earnings ratio since 2003,” the Census Bureau notes.
WHY WOMEN ARE LOSING GROUND
From 1982 to 2000, women made major strides toward closing the wage gap, taking it from 65 cents on every dollar to 80 cents. But since then, progress has stalled. While experts say COVID (which forced many women to step away from their careers) could partially be to blame for the recent widening of the gap, there are a number of other factors at play.
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“There’s no single explanation for why progress has stalled. The reasons for the pay gap are complex and impact women very differently based on their age, race, and location,” says Gloria L. Blackwell, Chief Executive Officer of the American Association of University Women.
While no one reason can explain the lack of progress, there are a couple of major culprits when it comes to women’s wages stagnating. One of them is caregiving, or what Richard Fry, a Senior Researcher with the Pew Research Group calls the “family gap.” For many women, it can be hard to balance caregiving duties with demanding, high-paying jobs – whether it’s a position at a legal firm, being the CEO of a major company, or everything in between. “You’ve got to be on call all the time, and so that makes it difficult, particularly for moms, to succeed in those positions,” says Fry. According to the U.S. Department of Labor, the impact of caregiving on a woman’s wages reduces her lifetime earnings by 15%.
Another reason? Women hold a majority of the country’s lower-paying jobs. “Women make up about two-thirds of workers in low-wage jobs, with women of color, especially Latina, Native women and Black women, particularly overrepresented in these jobs,” Blackwell notes.
RIPPLE EFFECTS BEYOND THE PAYCHECK
For women, the sting of the wage gap goes beyond the number on our paychecks. “Collectively, working women lose out on more than $500 billion each year. Gender pay disparities across a 45- or 50-year career mean women are less able to save for emergencies, start fewer businesses, and invest less in their retirement accounts – losing out on decades of gains and compounding interest,” explains Blackwell.
While the wage gap impacts women at all stages of their careers, its effects are most profound in retirement. “On all 3 components of the “three-legged stool” of retirement security — Social Security, pension, and savings — women fall short, largely due to account balances. As a result, women have 70% of the income that men have during retirement.”
WHAT WE CAN DO ABOUT IT
While women can do their best to negotiate higher pay, those efforts only go so far. Closing the wage gap once and for all depends on the government and employers taking action.
On the government side of things, at least 22 states have banned the practice of asking prospective employees about their salary history. Additionally, a handful of states have expanded pay transparency laws this year, including Maryland, Minnesota and Massachusetts. There’s a role for the federal government to play, too. AAUW continues to advocate for Congress to pass legislation like the Paycheck Fairness Act, which would address wage discrimination on the basis of gender.
Employers need to step up as well, says Blackwell. “Employers must amend their practices that compound the pay gap — such as using prior salary history in setting pay and prohibiting employees from discussing their wages,” she shares. “They should also conduct regular pay audits and always post salary ranges for jobs. They must also address implicit bias in hiring and promotion with tangible solutions.”
As we continue to work to close the wage gap, education will also play a role. Today, fewer people are going to college – and that’s particularly true of young men. Fry says if young women further outpace young men in completing college, it could help narrow the wage gap. “They already have a significant advantage. The advantage could get even bigger, given the enrollment trends that I see,” he says. As Fry points out, it’s something we’re already seeing play out in larger metropolitan areas, where young women are outearning young men. For example, in 2022, young women earned 102% of what young men earned in the New York and Washington, D.C. metro areas, according to the Pew Research Center.
THE BOTTOM LINE
You don’t have to sit on the sidelines, either. Getting involved can be as simple as picking up the phone and calling your elected representatives at the state and federal levels to let them know how important this issue is. “Stay in contact with legislators and let them know your opinion on the issue and legislation,” suggests Blackwell. “Yes, the pay gap impacts women — and it also impacts the economic health of families, communities, and our country.”
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